Friday, July 14, 2006
Old professions: Going after PayDay lenders
From a speech by USMC Major General Mike Lehnert, commander of Marine Corps Bases (West)
With our Navy partners we are going after Pay Day Lenders. Pay Day Lenders are the parasites found outside of our military bases in Southern California who prey on young Marines and Sailors because the lenders know they are uninformed consumers. Pay day lenders take advantage that California has some of the weakest laws in the country. In North Carolina, pay day lenders are limited to 36% annual percentage rates of interest. Here in San Diego we regularly see rates of 460% and I have seen rates as high as 920% being charged legally against our service members. Service members go into a cycle of debt. Ultimately because we expect our Marines to be financially responsible, their ability to reenlist, compete for good jobs and keep a security clearance is effected.
Let me be clear. Pay day lenders are not providing our Marines with a service. They are parasites, bottom feeders and scumbags. One of them sent me a note recently telling me that he was a member of an honorable profession and that I should back off. He told me that a pay day lending institution had been found in the ruins of Pompey after Mount Vesuvius erupted. I responded to him that archeologists also found a whore house and that antiquity did not bequeath virtue. It is a shameful practice.
Comments:
There are two possibilities. There is a distortion in the lending market that leads institutions who could charge less for money from taking the business of these high priced pay day loans or there really are military men who are that bad a credit risk.
If the former is true, pass the hat among the frugal veterans and gather a pot of money lent at reasonable rates that doesn't take advantage of the military's "uninformed consumers". Make sure that everybody knows they'll get just as much money but at better terms than the pay day loans just off base and let them have their money before they cross the gate. If you make a reasonable profit off the arrangement, the pay day loan places are rent seeking blood suckers. If you lose your money, maybe those guys are an "honorable profession" after all.
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With our Navy partners we are going after Pay Day Lenders. Pay Day Lenders are the parasites found outside of our military bases in Southern California who prey on young Marines and Sailors because the lenders know they are uninformed consumers. Pay day lenders take advantage that California has some of the weakest laws in the country. In North Carolina, pay day lenders are limited to 36% annual percentage rates of interest. Here in San Diego we regularly see rates of 460% and I have seen rates as high as 920% being charged legally against our service members. Service members go into a cycle of debt. Ultimately because we expect our Marines to be financially responsible, their ability to reenlist, compete for good jobs and keep a security clearance is effected.
Let me be clear. Pay day lenders are not providing our Marines with a service. They are parasites, bottom feeders and scumbags. One of them sent me a note recently telling me that he was a member of an honorable profession and that I should back off. He told me that a pay day lending institution had been found in the ruins of Pompey after Mount Vesuvius erupted. I responded to him that archeologists also found a whore house and that antiquity did not bequeath virtue. It is a shameful practice.
There are two possibilities. There is a distortion in the lending market that leads institutions who could charge less for money from taking the business of these high priced pay day loans or there really are military men who are that bad a credit risk.
If the former is true, pass the hat among the frugal veterans and gather a pot of money lent at reasonable rates that doesn't take advantage of the military's "uninformed consumers". Make sure that everybody knows they'll get just as much money but at better terms than the pay day loans just off base and let them have their money before they cross the gate. If you make a reasonable profit off the arrangement, the pay day loan places are rent seeking blood suckers. If you lose your money, maybe those guys are an "honorable profession" after all.
Post a Comment
If the former is true, pass the hat among the frugal veterans and gather a pot of money lent at reasonable rates that doesn't take advantage of the military's "uninformed consumers". Make sure that everybody knows they'll get just as much money but at better terms than the pay day loans just off base and let them have their money before they cross the gate. If you make a reasonable profit off the arrangement, the pay day loan places are rent seeking blood suckers. If you lose your money, maybe those guys are an "honorable profession" after all.
